What do I mean by that?  I mean that something that is unpleasant or less-than-desirable is more tolerable when you have already mentally allotted time for it.  Some examples:

• A car repair.  Knowing your car needs to get service, and scheduling that service, is far less of an inconvenience mentally than your car unexpectedly breaking down and needing a tow and repair, even if the latter is less expensive than the former.  In the case of a scheduled repair, you had already braced yourself  for the time, expense, and hassle of getting to that appointment and picking your car up later.  Your car breaking down, forcing the repair on you, is a surprise, and is out of whack with your expectations.  The result?  So much more stress and unhappiness.

• Traffic .  There are times when we can almost always count on traffic being there — rush hour, afternoons during weekends, the Sunday of a holiday weekend — no surprise that there are other people on the road.  You know this going in, and while the drive might be miserable, you already factored it into your trip and your expectations for the experience.  However, there are times when you don’t expect traffic — very early in the morning on a weekend, or very late at night, when usually traffic is very light…. and then BANG! — someone screws it up for everyone, and traffic is a mess.  Those are probably the most stressful kinds of interruptions, because they were not planned for, your schedule gets thrown off, and what was supposed to be a fairly smooth, quick trip, is now that much longer.  Those are minutes of your life that you will not get back.

My thought is that now most things fall into the “planned/unplanned” category now that humanity has shifted into the information age.  We have expectations set that we will be able to control our consumption of information, food, resources, art, etc. on our schedule.  A football game is too long to watch?  DVR it and skip the commercial breaks (and there goes that media spend on old-sytle ad slots down the drain).  Love talk radio?  Download a podcast, or better yet, an audio book…. or even your favorite show, right to your iPhone/iPad/Smartphone, etc.

The old commercial format, the commercial break, whether it is visual or auditory (e.g. a live read on a podcast that interrupts a conversation) is on the old model, the model where the consumer didn’t have a choice.  We don’t live in that world anymore, and I am increasingly convinced that the genie cannot be put back into the bottle.  Content providers and advertisers are going to have to think of new ways to get their marketing/branding message out, because to consumers like me, a commercial break, or a live read ad spot in the middle of content, is about as jarring as a car breakdown or a sudden traffic accident.  We’re so angry at the interruption, we can’t focus on the message, and that advertiser does not get results for their spend.

I would categorize these as old-style Interruptions:

• Commercial breaks
• Pledge drives that cut short content (looking at you, NPR affiliates — shame on you for cutting shows short to beg for more money — instead, you lost me as a listener vs. your podcasts)
• Popups/Popunders
• Prerolls without session capping
• Online Banners that expand or play audio without user initiation

So what’s left?  PLENTY!  In fact, there are a wide range of ads, many that are rich media or beyond the norm, that consumers accept and will accomodate in this era of new media:

• Prerolls with session capping and/or a skip button (a la YouTube)
• In-show or in-game sponsorship — e.g. the main character just happens to be drinking a Coke/Pepsi/Other, or the product is featured in other subtle ways (like a billboard in the backgroun)
• The web version of the above — skin takeovers.  They are commonly accepted as high-impact, low-nuisance ad spots that not only send out a dominating marketing message, but are actually aesthetically pleasing in some cases.  Look for more of these kind of paid sponsorship placements to eventually become a large portion of the inventory, and have behavioral targeting.  You could cap on a per-session basis, and get a great tangible and intangible result.
• Sponsorship logos and positions — most obvious during sports events, but applicable to other kinds of programming as well
• Lumping commercials into long segments to leave other content segments completely commercial-free.  As I mentioned in the last post, Howard Stern and Joe Rogan do this, as do other folks.  It works pretty well for both.
• Informal segments where nothing is sacred — Rogan is especially good at this.  Some of what he says about his products are backhanded compliments, but if anything, this seems to reduce audience resistance to the product, and allows him to keep credibility.  By keeping it in tune with the general tone of the show, these segments really just end up being the show itself, rather than something the user skips in order to get to the “real show.”
• Banner Ads and other static sponsorships — most web users accept that there will be advertising on the sites they use.  As long as it is not interfering with their ability to enjoy site content, they really don’t mind it, and behavioral targeting makes banners even more applicable to the individual user.  Subtle is better.
• Rich media ads that require user initiation — Sometimes rich media ads really are what the consumer wants.  Movie trailers, product demos, interactive games — as long as the user had a chance to opt in, rather than have it forced on them, these ads will meet with a receptive audience.

I loved all of the free content I got from the available podcasts, and stopped listening to radio.  No more listening to NPR pledge drives every 6 months, no more awkward commercial breaks in the middle of conversations, and a whole bunch of new content that terrestrial radio could never offer on such a niche level.  It seemed natural that this was one of the new ways content would be distributed and consumed — on demand, free, and mostly commercial-free.  What DVR’s are to visual content, podcasting was and is to audio content.

In the intervening years since then, much of the English-language programming for  terrestrial radio has collapsed or gone elsewhere.  Popular talk show hosts have retired, gone to satellite radio, or taken their show to the world of Podcasting, where the audience is smaller, but where you also have less regulation (no FCC policing you for content), a broad distribution infrastructure from partners like Apple (through ITunes’ podcasting support), and a format that users have embraced.

As the podcasting world has matured, we are starting to see big shifts in how podcasts are used , and how sponsors choose to become involved.  Right now, I find myself listening to a lot of comedy podcasts by stand-up comedians like Joe Rogan and Jay Mohr, both of whom  directly attribute higher attendance at their live shows to the popularity of their podcasts (both regularly are in the top 10 on ITunes for most downloaded).  At the same time, both hosts are very honest about their struggles to find sponsors and about their approaches to integrating those sponsors into their shows.  This is where it gets interesting, and gives those of us in the industry an early glimpse of how advertising and content interrelate.

For instance, Joe Rogan does all of his sponsorships at the very top of the show, before he even starts the show theme music.  It is done in a very casual, informal, conversational tone, and can be very irreverent.  While his guests are welcome to comment during this part of the show, and/or become part of the ad, Rogan is very careful to always note that this is the commerical part of the program, and to add in disclaimers to that effect.  What is interesting is that as he and guests sometimes lose the thread of the commercial and go into side topics,  these segments go way longer that he usually intended, sometimes as long as 15 minutes, a long stretch by any means for a commercial segment.  Yet for many of the listeners, myself included, these long rambling segments are often just as good as the show, almost seamless in terms of how they mesh with the content we are listening to.

Meanwhile, Jay Mohr’s podcast, a fine show as well, uses live reads in the middle of content, often stopping a guest mid-conversation to insert a 1-to-3 minute segment from a sponsor.  I don’t know about other listeners, but I find this absolutely maddening, as it is one of the main reasons I left terrestrial talk radio as soon as I had a way to carry mass amounts of audio content with me (e.g. the iPod and iPhone).  As a consumer of free content, nothing is more annoying to me than a break in the conversation, especially one that cuts off a guest while they are just getting to the good stuff.    So with Jay, I really do get irked when he does this, because it is an awkward way to shoehorn in a sponsor during an otherwise honest, heart-felt conversation.

What I liked about Howard Stern’s show back when he was on free radio was that his show had the flexibility to defer commercial breaks and lump them into big breaks so that he wouldn’t lose momentum in a conversation.  Joe Rogan’s show does this as well, but even more so, and as a result, you can often forget that the commercial segment is just that, and not some deeply personal conversation you are listening to.   The retired Tom Leykis, on the other hand (and also a good host — all of these people I am mentioning are/were at the top of their game) almost religiously stuck to the commercial break schedule, and it used to drive me nuts how he would lose a good conversational thread or call just to get to a break.  The irony here is that Stern, and Rogan, have commercial breaks that are, on aggregate, as long as any that Jay Mohr has (or Leykis had), but are packaged in a way that is more palatable, and respectful, to users and how they consume the content.  Case in point — I have never fast-forwarded past Joe Rogan’s commercial segments because I didn’t want to miss any part of the show, while on Mohr’s show, I have often skipped them, because they are fairly boilerplate, usually the same copy week-to-week, and so obnoxiously out-of-place that it actually lowers my opinion of him when he does them.  Sad but true.

This is a key point — in the new advertising model for new media, the commercial breaks of television and radio are something that will go the way of the dinosaurs.  Google/Youtube clearly is aware of this — while they do pre-rolls, they give the user the option of skipping after 5 seconds of watching, and they would never dare interrupt your video clip mid-stream to blast another ad at you, because they understand that an annoyed consumer these days is not fertile soil for a marketing message.  It is much better to get them while they are in a good mood, get the message in at the beginning, and to respect the sanctity of the content.  There are a lot of ways to get to this level — you can cookie and frequency cap users on a per-session basis, you can offer the option to skip the commercial after the first few seconds, but you give the user some sense that their time is respected, and that advertising inventory is respected and cultivated there, not just blasted out wholesale.

Not all sites adhere to this rule — many do run pre- and post-rolls with content, but without the option to skip.  Without naming names (after all, I work in the online world and need to stay in the good graces of future employers), there are sites I used to go to religiously that I have abandoned because I literally do not have the time or patience to waste 30 seconds of time each time I want to watch a video clip.  It’s a short term gain/long-term user loss to advertise this way, and is much like the much-maligned popup/popunder ad — eventually, it just was too annoying for its own good, and backfired on the message it was supposed to carry.  People blocked them or stopped going to those sites, much as I have stopped going to destinations that don’t offer flexibility with commercial placements that are anything more than a simple banner (think annoying ads with sound on by default, or expanding ads that are too easily triggered and have no close button).

These days consumers have way too many places to turn for content to put up with sites or programs that can’t keep up with how and why they listen to that content.  I know that Jay had a long history of co-hosting or being a long-term guest on radio shows, and I think he is still in “radio-days” mode of how he works the show.  Radio and Television are both pretty fixed in terms of how long programs can go, how long commercial breaks are, and how many breaks there are per show. In fact, until he finally got out of some of those habits, Mohr used to do time checks on his initial episodes, something almost asinine to do on a podcast.  But that’s how ingrained some of these old models are, and how folks think about marketing when faced with the challenge of how to monetize new content — they fall back on what worked.  Unfortunately, it isn’t working as well anymore, and it can really cheapen content when done wrong.

The postscript to this, and perhaps a future blog posting, is that this is still pretty virgin territory for advertisers, and it is vastly underutilized.  Programs like Rogan’s and Mohr’s (or Stern’s, or Carolla’s, etc.) are great in that they hit a very dedicated niche audience and brand that audience repeatedly — that’s why they do the show in the first place!  It builds demand, loyalty, and popularity in a very short time, something advertisers highly covet.  Yet most of the ads I hear are for non-mainstream companies.  I think Mohr’s Pepsi ads this Summer were some of the first Fortune 500 company ads I have heard on a podcast, so kudos to him.  I think very soon, looking back, marketers are going to realize what a steal a media buy is on a popular podcast.  More to come on this topic later, I am sure.

At the blog Pricenomics, Rohin Dhar has some interesting views on e-Reader penetration and whether it truly is something the “cultural elites” have adopted as the next step in reading. Before digging into the facts, his assumption was that e-Readers would be most prevalent in cities with a high cosmopolitan factor — In fact, he was wrong, and found out that Middle America was far more likely to own a reader.

I have found this to be the case as well with my close acquaintances and coworkers — if anything, the more literary a person is, the more they seem to be attracted to the luxury of having or owning a book, rather than thinking about it from a pure practical standpoint (the book is the content, not the container it came in). It’s almost akin to driving aficionados preferring manual transmission over automatic. I myself have given up on print versions of books, refusing to cede over any more of my small personal real estate to storing books I will never read again. I prefer being able to get a book right away, always having it with me (on my phone’s Kindle software, which is my choice of e-reader), and having a pretty flawless reading experience that way. If anything, I find I read books much more quickly on the small iPhone screen on Kindle.

Maybe the real way to look at it the issue is to view e-reader audiences as being synonymous with technie audiences in general — You will have some early adopters, and then the usual adoption curve for everyone else, but it’s not book-related demand, it’s about tech-related demand. If anything, I would think book readers might be more conservative, and thus less likely to adopt, than the average person.

The data seems to bear this out, but also the exception to this — a popular, “trendy” device like the iPad, which is also an e-reader (albeit a very overpriced one for just that activity) does seem to pull disproportionately from Apple/Mac fans, which (in my experience) do tend to be from the literati/Artsy side of the aisle. And as Rohin priced out, iPads have stayed relatively high-priced compared to e-readers, which have gone down steadily in price, almost in sync with the adoption curve timing for most new electronic devices. I think penetration has a long way to go, but the fact that iPad pricing remains so high is not just because of the later introduction — demand is strong for iPads. So iPads might be great for targeting that specific, “elitist,” demographic, but not e-readers as a whole, which are probably closer to the mean in terms of what user base they reflect.

However, the L.A. Times, much like other papers, ends up on the losing end of this proposition.

As more and more readers shift from print to online, fully-staffed publications like the Times are finding that they are not able to pay the bills with just ad revenue alone — they need the subscription fees (and the readership implied by that kind of financial commitment) for their bottom line

. So while the web, and Google, might love the local expertise that the L.A. Times brings to web users, the L.A. Times ends up losing out if they don’t make it back on ad revenue.

So their solution? Cookie-ing users and limiting the amount of free content the L.A. Times is willing to give away to frequent users. While this is annoying to people like me who have been essentially riding for free (though we have been seeing the display ads and rich media ads the Times loves to slather on their pages), it is an understandable move. But is it the right move, or a move of desperation?

On one hand, the tactic is good in that it still allows them to take advantage of a lot of web traffic, especially if one of their stories catches fire. They are able to compete with other papers for prestige regarding their coverage, and when their stories get picked up on the feed/crawl by Google, or featured on Drudge, that web traffic could possibly come almost unimpeded. Meanwhile, repeat users (people who go to the Times site specifically on a repeating basis) face a choice — pay a subscription fee, or go without.

And that’s where I think the strategy falls apart. I am probably the person in my family most on top of local news, especially local crime news, yet I balk at paying that fee. It’s just not worth it to me — I can still go to many other places, including feeds that re-print Times content (possibly owned by the Times themselves), and not have to pay. That’s just the way the web has always succeeded — free content, but lots of ads. The only part of the online industry to permanently buck this trend for any long period of time was the MMO community, but even they are going free-to-play, with optional payments being the new revenue stream. Adult had the best chance at the paid model and really has tried to make it work, but they also lost out to technology and how easy it is to steal and host content overseas illegally.

At the end of the day, you have to find an advertising model that works and pays the bills. I don’t know anyone who works at the Times, so I don’t know for sure, but my guess is that this is a move of desperation. The WSJ and Financial Times have been on a paid model for years, but those are niche, and luxury/prestige, publications. The L.A. Times does not have that kind of cache; With people like me getting turned back, habits are changing, and right now, I’m losing the L.A. Times habit.

So — you win the battle and lose the war. Maybe they have no real choice but to try this, but I think it depreciates their online assets and online readership by doing this, so in the event that they have to make more cuts or sell, the property is worth even less. It should be interesting to see what effect this tactic has over the next year and whether they can make it work.

This prediction isn’t as gutsy as it sounds, because the study cited in the article listed all manner of devices under “mobile,” including laptops, and with the expectation of wider adoption of tablets. While I don’t think this is a bad forecast, I question that tablets are or will truly be “mobile” devices. While I do think that tablets almost certainly will replace most laptops in upcoming years, especially for home use, I question whether a majority of them will be mobile-enabled, meaning, have a cellular data connection. There are still a lot of questions about the danger of cell phone use with regards to health, especially with children, and a lot of tablets run off of wifi. It’s also a lot cheaper to run a tablet strictly as wifi, so unless cellular data plans become free (as they have become with the Amazon Kindles), I don’t see a lot of users, especially when the tablet is for a child, activating the data plan that comes with their iPad, for instance. Maybe this becomes less problematic if Wifi hot spots continue to become ubiquitous, free, and more secure for users browsing on them.

Here’s the other thing — tablets don’t really access “mobile” web inventory. While smartphones usually access the mobile web version of a publisher’s site, in order to make viewing information comfortable for the user, the whole point of a tablet is the wider screen — that’s the real differentiator. My iPhone is essentially a laptop in my pocket — one of the main reasons I’m not excited about an iPad for mobile use is that I don’t need it! But at home, work, or school, a tablet becomes handy. And tablets view the normal version of a web site, which means that really, they are accessing the same content as someone on a home PC with a hard-wired connection to the web. So yanking a budget from the “normal web”, even for local, is counter-productive, even if you specify to the publisher that you want that inventory device-targeted to tablets. At the end of the day, why miss on a chance to get someone looking for a local listing?

I agree that ultimately, being able to access information on the move, and having advertising around that, is the wave of the future — I just don’t see regular web advertising going away, even for local. A lead is a lead is a lead, and most advertisers will let ROI determine what they want to cut down on. A home user that is doing research is just as valid a local lead, and maybe even more so in terms of overall spend or long-term relationship, than a spur-of-the-moment smartphone user looking for a quick bite to eat, who may never return. It’s all about the total revenue and ROI for the lead you pay for, and incremental revenue will always win the day in this argument.

Specifically, this refers to the practice of going into a retail establishment to physically examine a product, but then using your mobile device, usually enhanced by an app specifically for this purpose, to price-compare and buy elsewhere or online. I had expressed my own experiences about using this practice in my previous columns, but at least in those cases, I had actually made purchases at those locations, having confirmed I was getting the best price already. In my case, I was using the apps, like Amazon’s shopping app, to get product reviews to make sure I was buying the right product for my needs.

Per Kathryn’s article, the fear among retailers is that the mobile-enabled consumer is starting to use brick-and-mortar locations like a product showcase, but not actually making purchases from that location or even from that company. But is this really the case? Per the great (but slightly confusing) chart she has in her article, right now about 14% of folks who scan the bar code in-store with an app buy the product someplace else. She points out that the real number is probably significantly less (less than 10%), and that the sample this percentage applies to is probably biased because it was taken in New York. Her point here is that big cities like N.Y., L.A., and Chicago probably have more users who are savvy about shopping like this as opposed to areas with lower smart phone penetration rates. I’m sure that number of “scan and scram” users will grow as smart phone penetration passes the 50% mark overall and users become more aware of apps with this ability, but is this a bad thing?

I think a lot of retailers have been able to monopolize consumer information for quite a long time — when you were in the store, pre-smart phone, you were pretty much stuck with either having had to do your research ahead of time, or making a decision on the spot about whether the price was right. In many cases, the price was very wrong, and I’m sure that in some cases, that ended up with a very dissatisfied customer later on who decided to write off that particular establishment from that one example. Is that the shopping experience a retailer wants consumers to have, just to make a huge profit off of one item?

So yes — smart phones keep retailers honest, but they also keep retailers on their best behavior, which is a great customer-retention strategy in the long run. For all of the scanning you can do, you often, especially on high-dollar items or things you crave at the moment, are willing to sacrifice a few dollars to buy the item now, while you are in the store, and while you are “hot for it.” Deferring that pleasure for a savings of less than 5% of the total value, and then having to wait for it to be delivered (where it could be damaged in transit) is not always a very palatable alternative in today’s world. So I don’t think the retail location is going away any time soon, and Kathryn, to her credit, also came to the same conclusion in her column.

First, I was initially skeptical of the iPad 1 and 2, thinking them both to be overpriced toys rather than anything useful that would persevere as part of the home computer marketplace. As I stated in a post last month, I was clearly mistaken, and it is becoming clear that tablets like the iPad are soon to become the replacement in many utilities for what we currently use laptops for, something I would not have expected.

Now, with the lower-priced, budget-featured Kindle Fire, users are apparently piling on, and this is rapidly turning into a second-tier market for marketers. In fact, according to this study from GigaOM, Kindle Fire is growing at a rate that is faster than that of the original iPad (iPad 1), with advertising impressions on that platform pacing at a 19% daily growth rate. This translates into a monthly run rate of hundreds of millions of impressions, meaning that a huge new market for ad inventory has sprouted up almost overnight!

As the study points out, Amazon’s Fire benefitted from Apple’s initial foray into the tablet market, which, like the iPod and iPhone before it, created and developed markets where there were none before, at least not serious contenders. So Apple fertilized the soil, provided the rain, and Amazon’s new seed sprouted very quickly. However, Amazon also enabled this through pricing that directly targeted the segment of the market that either could not afford the iPad or did not want to spend that kind of money, a segment that was less cautious about spending $200 than $500-600 dollars. The fire was likely a trial-buy into the tablet market for a lot of these folks, and one that did not have the painful bite that early adopter devices usually have. Personally, I would be more likely to buy a Fire now, with the expectation that a 1-3 years from now, an Ipad will be similarly priced, and have a lot of the early adoption issues ironed out, just like the iPod and iPhone before it. I love my iPhone and iPod, but I am glad I did not buy the first models — I let everyone else absorb that initial bug-finding and research pay-off cycle for those products, and reaped the rewards for my patience later. I am certain that a lot of these Fire buyers are similarly-minded when it comes to the iPad, and are using the Fire as a stop-gap.

The other thing to remember is that Amazon did have the Kindle out for quite some time, even before the iPad, and while it was not a true tablet, it was a tablet-like device that had its own early-adopter period and ramp-up of improvements that eventually became standard, and quite cheap. The first Kindles were in the $300 range — now you can buy one with better capabilities (3 years later) for around $75. So the lesson here is that patience rewards those in the marketplace who are on a budget.

Getting back to the study — It notes that since the Fire technically runs off of Android, it helps Android in terms of Wireless OS market-share, which lost ground last month as the iPhone 4s hit the market. Android currently holds an even 50% of the market, and Apple, 30%. The change in how the Fire is viewed may eventually lean towards the Fire as its own platform, so Amazon vs. Apple, rather than Android vs. Apple — this is what the study speculates, anyways.

There are two sets of winners here — the users who now have two tiers of pricing to choose from, and marketers who now have an ever-growing inventory on a new platform to sell on. Users and marketers will also benefit from the competition — prices should fall, capabilities should increase, and we will see more effort put out by publishers and developers in nurturing and growing this ad space. Personally, I can’t wait to have this as an option someday soon to package as ad inventory for sale.

Until next time — Glenn Highcove

This is also the double-edged sword, because the content library is what makes or breaks a streaming service, as Netflix can attest to. Much like Netflix, Hulu is facing upcoming struggles with their content providers and joint owners, which include Disney, NBC Universal, and News Corp. Per the article, many of those stakeholders worry that the streaming services are cutting into Television viewership of those same programs.

This vacillation about streaming media really is a shame, because you really cannot get the genie back in the bottle once programming becomes available in that channel and you set that expectation with consumers. Many users have gone to the trouble of investing in set-top boxes specifically to do this, so rolling back features or content will leave a very bad taste in their mouths. If consumers can’t get this content the legal way, they will turn to piracy, and no one makes money when content is pirated, especially not advertising or marketing dollars.

We’re at a junction with content where providers need to rethink their business models and what the true product life cycle is for visual media (DVD’s, CD’s, BluRay) and televised content. As broadband becomes more and more prevalent world-wide, visual media becomes less and less relevant — who needs to keep all of these shiny discs in your house, taking up storage space, when you can get it from the cloud and own it there? Those of us who have accessed Hulu or Netflix over streaming-compatible device, like a PS3 or X-Box, can attest to how much better the experience is. No more going back and forth swapping discs — you can much more easily view and re-view content, save your place on what you were watching, and get better acquainted with offerings from a particular provider. I think for most users, the dissatisfaction is around the sparse offerings, and I think most folks would accept having to watch an ad or two in exchange for having better selection.

Television is slowly dying. I predict that it will never make more revenue than it is this half of this decade — DVR’s were the sign of consumer discontent with the model. We are tired of scheduling our lives around content, and especially with the bloated commercial breaks that eat into more and more of the program time. In fact, this was what made me buy my first DVR (a Tivo) — finding out that commercial breaks were in fact growing and shortening the actual content that I had turned on the set to watch. Time is valuable, and commercial breaks that are unreasonably long are an abuse of that time. DVR’s users have now made many of these commerical breaks irrelevant — streaming media has finished the job.

Marketers and Content Providers need to find better, more user-friendly, and time-efficient ways to get their message out. Sponsor content within the program with product placement — use sparse pre and post-rolls in streaming services with more complete offerings. It is foolish to bet the bank on Television/Visual Media and sacrifice progress, fight the future, and alienate consumers by trying to force users back to the television model of the 1990s. We’re all past it — the Studios and Publishers need to move on as well, and embrace change, not fight it. Now is the time to make the mold before the content pirates break it.

To get back to the point of the article — Hulu grew because they added content. This is positive feedback, and I can only hope that this will help content providers re-consider their choices RE: Hulu’s future and Netflix’s content offerings. Make deals, get rev share, create advertising inventory, and be prepared to sunset Television advertising as a product, as streaming and online inventory continues to grow.

Until next time — Glenn Highcove

The article today is from The Chronicle of Higher Education, and the article is called “A Moneyball Approach to Higher Education,” making reference to the way the Oakland A’s leveraged new statical measurements to hone their team’s performance. In the article, the Chronicle explains how various test programs in select colleges are utilizing cues, such as grades, test scores, even prior class choices by similarly-minded students, to help students excel in the classroom, and to improve the effectiveness of the instructors there. Various techniques are used, from the very simple multiple choice practice tests, to seating location (detected and plotted on a map, depending on log-in location) to the more advanced techniques like tracking mouse movement on the class’s interactive interface to see how effectively students are absorbing the lesson and utilizing the coursework software.

The software that is being used seeks some very basic, but admirable goals:

1. Increase the rate of comprehension in the class — This could be as simple as pairing people who got wrong answers on class exercises with right ones, or it could be a more complex interaction of grouping students of various levels. The main focus here was to move away from the theory, and more towards interactive understanding, with more feedback from students with the professor and with each other.
2. Monitoring student performance — The software seeks not only to identify the best and worst performers, but utilizes algorithms to spot the borderline cases, those for whom a little extra help or attention makes the difference between a pass or fail grade.
3. Amazon/Netflix-style algorithms that make suggestions to students of what courses they should take. — This is more complex than it sounds — not only would it try to suggest areas of interest as students bloom, but also attempt to help failing students find the right niche, the right major, the right class to discover. I find this very exciting, because some of my favorite classes were actually my electives, not my major requirements. Looking back, I sometimes wish I had tried other paths — software like this would open a lot more doors of possibility and help struggling students find something that works.
4. Eventually, developing a Facebook-like network that would allow schools and students to find each other — You might ask, don’t schools and students do this already? Yes, but in many cases, both parties go into the bargain with preconceived notions of what they want, and we all know that reality is often different than theory. I wanted to be a film major when I started college — I realized later this was not what I wanted, and even was in the process of becoming a police officer by my senior year! What they envision is a process by which students build a profile, fill in their interests, inclinations, achievements, and schools reach out to them, Facebook–style, to friend them and get more information. This could be very positive, and many students with unrealistic expectations (trying for a top 20 school with mediocre grades) or even just the wrong path (loving journalism but not applying to a school that has that major) might instead find much better colleges for their tastes seeking them out.

This is all very exciting, and it is good to see folks finally thinking seriously about using technology to actively shape our lives for the better! This is also a smart move for colleges and universities, because right now, there is a 50% turnover in terms of folks dropping out of school before they get a degree. If they put a dent in that turnover rate by enriching lives and actually delivering on the promise of “education,” they increase their chances for a full 4 years of tuition, boost their reputation (because we all know that satisfied and dissatisfied customers are good and bad PR, respectively), and build a long-term relationship that can lead to future profits (grad school or the alumnni’s children coming to the same school).

I would love to see other institutions take the same approach, and I’m sure we will. This also legitimizes these same practices for marketers so that our industry isn’t seen as the “evil big brother” if we’re using the same techniques already accepted in other institutions. What becomes familiar becomes benign, and better-focused efforts intelligently targeted by data mining can really end up with great results for advertiser, publisher, and customer alike.

Until next time — Glenn Highcove

Google now owns 85% of all searches, which is probably the main reason for the increase in advertising market share. After all, Google makes a vast majority of its revenue from the text ad channel, which works quite well for many different types of advertisers, from mom and pop shops to agencies to direct response clients. Google also continues to drive value to consumers through free products and through searches that maintain the balance between utility and revenue-generation — they are in fact more unbiased than a lot of media outlets these days

The study doesn’t just focus on Google, but also has some macro views of the advertising industry, which predicts overall growth rates of 5% a year through 2014, despite the looming financial crises in Europe and the stagnating economy here in the United States. While this would seem counter-intuitive (why advertise products when less and less of us have jobs or disposable income?), advertisers are apparently sitting on large war chests of savings and are looking to spend money to make money. Additionally, the U.S. has a presidential election year in 2012, and London has the Olympics pending, which will inject more advertising dollars into the mix.

An interesting call-out in the study is that while the traditionally large economies of the United States and Japan are showing some recovery, the big growth is from emerging markets — this mirrors trends in the stock market, which is expected. These emerging markets are actually forecasted to deliver 58% of the lift through 2014 – I can’t help but wonder if they are going to get overheated and expand beyond a point of sustainability. Will there be an ad crash after 2014, especially if the Euro fails and there are less North American and European consumers able to buy products from these emerging markets, or will the growth be self-sustaining as citizens of these countries join the middle class and are able to spend en massse?

The markets in question here are China, Russia, Indonesia, Brazil, South Africa, Argentina, India, Turkey, Mexico, and South Korea. For all of the above, I speculate that political and economic upheaval could upset some of these plans, and I am not as bullish on the growth forecast. For instance, Mexico is practically in the middle of a civil war, wrestling for control with cartels, and may very well capitulate and go back to the status quo (which may cause trade problems with the U.S. as a result). China has yet to hit the real growing pains of their sudden economic expansion, but those times are approaching quickly. Russia is batting allegations of election fraud, and Putin may have a tough 2012 election year on his hands. South Africa also has some long-term structural issues to deal with, as well as a brain-drain. South Korea has the North to worry about.

I find it interesting that the advertising market has done as well as it has in this poor economy (for first-world nations). I question sustainability if Europe and North America do not find long-term solutions for the issues that plauge their economies, but if they do, then the current forecasts will be conservative, and we will see spends shoot up even higher than they are now. I’m keeping my fingers crossed that we will see improvements in 2012 domestically, and that the forecasts next year will prove me wrong (in a good way) for all involved.

Until next time — Glenn Highcove